Should the company accept the special order

Assignment Help Managerial Accounting
Reference no: EM132862149

Question - Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The company's accounting system says that the unit product cost for this bracelet is $260.00 as shown below:

Direct materials $144

Direct labor 82

Manufacturing overhead 34

Unit product cost $260

The members of a wedding party have approached Imperial Jewelers about buying 14 of these gold bracelets for the discounted price of $369.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $465 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed.

To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity.

Required -

1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?

2. Should the company accept the special order?

Reference no: EM132862149

Questions Cloud

Describe the age appropriate activity in some detail : Physical development, Describe the age appropriate activity in some detail. Identify how the activity supports physical development for that age group.
Standard deviation of this probability distribution : Cutler Electronics received eight of these digital cameras. What is the standard deviation of this probability distribution?
What did notice about the range of emotions experienced : What did you notice about the range of emotions you experienced during the 4 days? What type of experiences generated the strongest emotional responses?
Role of the wto and the imf in global business : Examine the role of the WTO and the IMF in global business. Is their impact, on balance, positive or negative?
Should the company accept the special order : What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Should the company accept the special order
Describe the event the client experienced : Describe the event the client experienced. Discuss how the client interpreted and overcame the event. Discuss the post-traumatic growth the client experienced.
Define decision variables-objective function and constraints : Coach Boyle is trying to choose the starting lineup for the basketball team. The team consists of seven players who have been rated
What is parents or a family member position of union : What is your parents or a family member position of unions? What position does most companies take on unions? How to they argue for or against them?
Explain international business organisation : Explain how does an international business organisation achieve its internationalisation objectives in the contemporary context as follows,

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Determine for alpha company dollar amount of cafeteria costs

Determine for Alpha Company the dollar amount of its Cafeteria costs that are to be absorbed by the Printing and the Binding Department

  What relevant costs include in a make-or-buy decision

What relevant costs include In a make-or-buy decision? Drawings of goods should be included in the cash receipt in the cash budget

  How do discuss any four performance measurement systems

How do discuss any four performance measurement systems that can be usefully developed and used by multinational corporations.

  What is average fixed manufacturing cost per unit produce

If 35,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?

  How much of the total support department costs should be

Assembly department, Using the step-down method, beginning with human resources, how much of the total support department costs should be allocated to assembly?

  Find what are the total assets at the end

Find What are total assets at the end of 2018? (Note: ignore any implications of interest on the loan.) Precision Builders Construction Company started in 2018.

  Prepare the journals necessary to account for current tax

Prepare the journals necessary to account for current tax and deferred tax in the financial statements of Parmesan Limited. (Show all workings)

  Find what cost of marginal investment in account receivable

Find What is the cost of marginal investment in accounts receivable under the proposed plan? What is the net result of increasing the cash discount?

  Determine golden valley should discontinue

Golden Valley sells computer equipment, Determine whether Golden Valley should discontinue the furniture line and the financial benefit (cost) of dropping it.

  Job-order costing sertoma condos inc

Assuming that the amount of rent revenue from Condo 2 is $48,000, what amount of income did it earn? Based on the preceding information, will the company show finished goods inventory

  Determine the direct materials price variance

Direct materials variances - Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance

  Compute the missing amounts on company financial statement

Compute the missing amounts on the company's financial statements. (Hint: What's the difference between the acid-test ratio and the current ratio?)

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd